Nvidia Sets Up Bigger Test Ahead of Earnings Release

Nvidia's stock price surged by 11% in the first week of August, marking its largest single-week movement in over a year. This significant gain indicates that the market is ready to move higher and sets up a bigger test ahead of the company's earnings release.

The technical outlook for Nvidia is solid, with only one hurdle: potential resistance at its existing all-time high. However, bullish signals from moving averages, MACD, and stochastic suggest a strong trend-following movement that could lead to a retest of the critical resistance or even a higher high by mid-to-late month.

The move was supported by trading volume and analysts who expect larger gains. Fifty-one out of 53 analysts tracked by MarketBeat rate Nvidia as a Buy, with a consensus forecasting over 30% upside from the critical resistance point and a potential doubling of the stock's value.

Valuation metrics also suggest that Nvidia's stock may double in value with time, trading at approximately 24 times its current-year guidance. This is only slightly above the S&P 500 average and below historical norms, setting the stage for a 50% upside from price-multiple expansion alone.